Tax Cut Plan Draws Ire from Left and Right

CBS

Obama, taxes, tax cuts
CBS

Senate Majority Leader Harry Reid on Thursday night unveiled the legislation that would put into place President Obama's tentative tax cut deal with Republicans. Reid scheduled the first "test vote" on the bill for Monday afternoon, even as grassroots organizers on the left and the right pressure Congress to oppose the deal.

"This bill is not perfect, but it provides the economic boost middle-class families and small businesses in Nevada and across America need," Reid said in a statement.

Mr. Obama on Monday announced he agreed with Republicans to extend the Bush tax cuts (set to expire at the end of the year) for all Americans -- including the wealthiest -- to ensure they would not expire for middle class Americans. The agreement also includes a commitment to extend unemployment insurance, temporarily cut the payroll tax, and set the estate tax at a relatively low level, among other things. The package deal is expected to cost around $900 billion and is not paid for.

The deal has inspired outrage within Mr. Obama's liberal base. House Democrats yesterday voted against consideration of the package as Mr. Obama laid it out, and in a closed door meeting, the Democrats started a chant of, "Just say no."

Some Democrats reportedly let out their frustration specifically with Mr. Obama. One unidentified lawmaker in the meeting muttered, "F*** the president," Roll Call reports, and Rep. Jerry Nadler reportedly said, "we can't trust him" to extend the upper-income tax cuts even further.

The resistance of rank-and-file Democrats reflects the anger among liberal activists. The group the Progressive Change Campaign Committee has been pounding the president on the issue of the Bush tax cuts, pressuring him to keep his campaign promise of letting the tax cuts for the wealthy expire. On Thursday, the group began running its latest ad, which uses the president's own words against him, in Indiana and Washington, D.C.

The 30-second spot (watch it at left) uses footage of Mr. Obama at a 2008 rally in Indiana, where he said the tax cuts for the rich "offend my conscience."

"He's promising four more years of tax cuts for CEOs," Mr. Obama said of his presidential opponent, Sen. John McCain (R-Ariz.). "Tax cuts that he once voted against because he said they offended his conscience. Well they may have stopped offending John McCain's conscience somewhere along the road to the White House. But George Bush's economic policies still offend my conscience and they still offend yours."

Meanwhile, several conservative activists are just as displeased with the deal. The Tea Party Patriots are urging their supporters to lobby Congress to oppose the deal because it violates commitments in the House Republicans' "Pledge to America." Borrowing arguments from conservative columnist Hugh Hewitt, the group blasts the secretive nature of the deal's creation, the spending elements in the package, as well as the revival of the estate tax (or so-called "death" tax).

Other conservatives like Charles Krauthammer are also speaking out. Krauthammer penned an op-ed today calling the deal the "Swindle of the Year."

In spite of the significant resistance to the deal, there is still notable support for the plan on Capitol Hill, from both the left and the right. Republican Sen. Charles Grassley (Iowa), a senior member of the Senate Finance Committee, and Democratic Rep. Dave Camp (Mich.), a senior member House Ways and Means Committee, released a joint statement yesterday in support of the proposal. Camp said failing to approve the deal would be "a devastating blow to American taxpayers, small businesses and our nation's economic recovery."

In order to improve the deal's chances of success in the Senate, negotiators altered the plan yesterday to include tax incentives for various alternative energy programs.

In an an interview with NPR News released Friday, Mr. Obama said that in spite of the controversy, he expects the plan to pass because "nobody - Democrat or Republican - wants to see people's paychecks smaller on Jan. 1 because Congress didn't act."

Watch Washington Correspondent for the Philadelphia Tribune Charles Ellison talk about public reaction to the tax cut deal on "Washington Unplugged":

Obama: Tax Bill Will Pass, Possibly With Changes
House Democrats: "Just Say No" to Tax Deal
Obama Tax Cut Plan would Increase Taxes for the Poor
Sen. Sanders: Tax Cuts For Wealthy "Absurd"



Stephanie Condon is a political reporter for CBSNews.com. You can read more of her posts here. Follow Hotsheet on Facebook and Twitter.

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